Thursday, April 3, 2014

Mark Perry Rips Apart the Alleged Gender Pay Gap Claims

Perry writes:

Next Tuesday (April 8) is “Equal Pay Day,” which is an annual event to bring public awareness to the “gender wage gap.” Based on the questionable assumption that women earn only 77 cents for every dollar a man earns, April 8 marks the date in 2014 that the average woman would have to continue working to earn the same amount of income the average man made in 2013, i.e. 68 extra days of work to make up for the 23% wage gap. Here’s how the National Committee on Pay Equity (the organization that sponsors “Equal Pay Day”) explains the 23% gender wage gap:

The wage gap exists, in part, because many women and people of color are still segregated into a few low-paying occupations. More than half of all women workers hold sales, clerical and service jobs. Studies show that the more an occupation is dominated by women or people of color, the less it pays. Part of the wage gap results from differences in education, experience or time in the workforce. But a significant portion cannot be explained by any of those factors; it is attributable to discrimination. In other words, certain jobs pay less because they are held by women and people of color.

Does the evidence support the claim that discrimination explains a significant portion of the gender wage gap? Not really. Let’s explore further. And without even considering any empirical evidence, the claim would be unbelievable prima facie. Reason? It would mean that thousands of employers across the country could easily and immediately save 23% on their labor costs by hiring only women (or firing all of their male workers and hiring female workers). That is, it couldn’t possibly be true that the gender pay gap is mostly due to discrimination, because it would mean that profit-seeking employers all across the country have overlooked an easy way to save 23% on their main cost – labor.

Let’s then consider empirical wage data from the Bureau of Labor Statistics (BLS) annual report on the “Highlights of Women’s Earnings.”

6 comments:

This very obvious argument has been ripped apart many times. Mark Perry apparently does not understand how gender discrimination works. Women and men get the same pay when hired but women are denied promotions or when they get a promotion they receive lower pay than their male counter parts.

Example: Ledbetter’s salary was in line with the salaries of men performing substantially similar work. Over time, however, her pay slipped in comparison to the pay of male area managers with equal or less seniority. By the end of 1997, Ledbetter was the only woman working as an area manager and the pay discrepancy between Ledbetter and her 15 male counterparts was stark: Ledbetter was paid $3,727 per month; the lowest paid male area manager received $4,286 per month, the highest paid, $5,236

But you're going to straighten him up with your ample personal experience in the matter. Go ahead, champ!

-- Women and men get the same pay when hired but women are denied promotions or when they get a promotion they receive lower pay than their male counterparts. --

You don't say! Imagine that, a woman being denied her well-deserved promotion! But have you considered the notion - and I know, it's a stretch, right? - that maybe people are given promotions based on, you know, actual performance?

-- Example: --

Oh, boy! Here comes an *example*!

-- Ledbetter’s salary was in line with the salaries of men performing substantially similar work. Over time, however, her pay slipped in comparison to the pay of male area managers with equal or less seniority. --

And the only answer coming out of your lovely brain is that Ledbetter (clever name!) was being *denied* the higher wage she do deserved for just being there! Am I rite or am I rite?

> Mark Perry apparently does not understand how gender discrimination works. Women and men get the same pay when hired but women are denied promotions or when they get a promotion they receive lower pay than their male counter parts.

These two statements are completely unrelated to one another. The article as well as articles by Walter Block and others demolish the argument that gender discrimination exists in regards to salary. They offer strong statistical evidence and a solid explanation why no gender discrimination can exist for long in a free labor market.

If you want to argue that their logic is faulty and, thus, their statistics are in doubt, fine. You have not come close to doing that.